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US Panel Locks in Final Tariffs on Canadian Softwood Lumber

Raquel Nash |Friday, December 08, 2017

US Panel Locks in Final Tariffs on Canadian Softwood Lumber

In a 4-0 vote, the agency sided with the U.S. Lumber Coalition, a group representing U.S. lumber producers, and determined that the U.S. lumber industry is "materially injured" by imports of softwood lumber from Canada that according to the U.S. Department of Commerce "are subsidized and sold in the United States at less than fair value".

American producers allege that the Canadian industry is subsidized by the provincial and federal governments, while in the US, prices are set by the market - a situation the USA contends is unfair.

The commission voted 4-0 in favor of the lumber industry, according to the US lumber coalition.

"Now, with a level playing field, the U.S. lumber industry.can have the chance to compete fairly", said Jason Brochu, co-chairman of the U.S. Lumber Coalition and co-president of Pleasant River Lumber Co.in Maine.

The commission made the decision in a unanimous vote on December 7. To our knowledge, the ITC has never before reached an affirmative decision of injury when an industry was enjoying the most profitable period in its history, which is the case today for the US lumber industry. It has long argued Canadian lumber should be subject to a tariff to offset the subsidy.

Canada's softwood lumber exports to the USA have fallen since the Americans first imposed new duties earlier this year, but near-record wood prices have meant there has been less pain to the industry than expected.

The Canadian government has denied taking actions to prop up the industry to the detriment of the USA industry. Canada also kicked off a process to challenge the tariffs at the World Trade Organization, the global trade arbiter that is under increasing pressure from the Trump administration.

The disagreement centers on the fees paid by Canadian lumber mills for timber cut largely from government-owned land.

In 2016, imports of softwood lumber from Canada were valued at an estimated $5.66 billion.

In testimony this week before lawmakers, Canada's chief Nafta negotiator, Steve Verheul, said the softwood dispute between the USA and Canada "will continue to be a hard issue" and said it is unlikely a solution will be incorporated in any renegotiated continental trade pact.

More than 95 percent of all imported lumber came from Canada past year.

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